Final Results

RNS Number : 7531Y

Cora Gold Limited

17 May 2021

 

Cora Gold Limited / EPIC: CORA.L / Market: AIM / Sector: Mining

17 May 2021

Cora Gold Limited ('Cora' or the 'Company')

Final Results

Cora Gold Limited, the West African focused gold company, is pleased to announce its final audited results for the year ended 31 December 2020.

Highlights

● Published Scoping Study in January 2020 on the Sanankoro Gold Discovery, which included a scenario at a gold price of US$1,500/oz showing an 107% internal rate of return and a US$41.5 million net present value (at 8% discount rate)

● Secured conditional US$21m Term Sheet with investment firm Lionhead Capital Advisors Proprietary Limited in June 2020 to fund the future development of Sanankoro post Definitive Feasibility Study ('DFS'), which is on track to complete by end of 2021

● Raised in excess of US$5.4 million from the issue of shares

● Appointed Norman Bailie as Head of Exploration, an accredited Chartered Professional Geologist and Manager with 29 years' experience in gold mining and exploration

● Appointed Andrew Chubb (Partner and Head of Mining at natural resources focused investment bank Hannam & Partners) as an independent non-executive director

● Post period end, awarded the Sanankoro II permit in March 2021, and commenced largest drill programme for up to 35,000m planned to complete by end of July 2021, with dual focus on targeting resource growth and converting existing Inferred resources to Measured and Indicated

● Initial results from the ongoing drill programme at Sanankoro include:

○ 54m @ 2.07 g/t Au from 20m (in hole SC0311), including 2m @ 17.71 g/t Au

○ 34m @ 2.14 g/t Au from 13m (in hole SC0312), including 3m @ 19.14 g/t Au

○ 24m @ 2.50 g/t Au from 16m (in hole SC0331), including 6m @ 5.53 g/t Au

○ 23m @ 1.55 g/t Au from 47m (in hole SC0332)

○ 28m @ 1.54 g/t Au from 17m (in hole SC0327)

○ 20m @ 2.04 g/t Au from 20m (in hole SC0328)

○ 16m @ 1.67 g/t Au from 62m (in hole SC0329)

○ 4m @ 9.06 g/t Au from 81m (in hole SC0325)

○ 13m @ 2.09 g/t Au from 68m (in hole SC0309)

Bert Monro, CEO of Cora, commented, "2020 will undoubtedly go down in history as a year which saw many changes.  Cora, although largely unaffected by the pandemic, saw many changes with numerous positive advances made.  The year started well, with the publishing of a Scoping Study for our flagship Sanankoro Gold Project, which highlighted its potential to be a highly profitable oxide mine. Investor confidence resulted in raising over US$5.4 million through the issue of shares, we signed a conditional US$21 million term sheet with Lionhead to fund the future development of Sanankoro and made two key appointments to drive the project and Company towards the next stage of development: Norm Bailie, a distinguished geologist with a significant gold discovery and development track record in West Africa , took over the mantle as Head of Exploration; while Andrew Chubb, a n experienced natural resources financier , joined as an independent non-executive director. 

"These changes positioned us to hit the ground running in 2021, with the initiation of a new, much larger, drilling campaign aimed at increasing the mineral resource estimate   and the rapid advancement of the DFS, targeted for complet ion by the end of the year.   With a busy schedule of work programmes planned, we look forward to the second half of 2021 and beyond with confidence."

Annual General Meeting

The Company is holding its Annual General Meeting (the 'AGM') at 12.00 p.m. on 22 June 2021. Due to the ongoing impact of the COVID-19 pandemic, the AGM will take place online. There are two ways in which attendees may join the AGM:

Option 1 - dial in using one of the telephone numbers and Meeting ID set out below:

● Telephone number: [phone]; [phone]; or [phone]

● Meeting ID: 889 7558 0175#

Option 2 - over the internet, which requires the use of a device (computer, laptop, tablet or smartphone) connected to the internet - the device will need speakers and, if required, microphone capability in order to be able to speak.

● Hyperlink https://us02web.zoom.us/j/88975580175  

The Company's board of directors strongly advises shareholders to submit their votes by proxy prior to the AGM. Shareholders who have submitted a proxy may still attend the AGM. However, submitting a proxy means shareholders know that their vote will be counted. Copies of proxy forms can be downloaded via the Company's website at www.coragold.com/category/company-reports .

The Company's Annual Report and Financial Statements for the year ended 31 December 2020, including the notice of AGM, will be posted to shareholders today and will be available thereafter on the Company's website http://www.coragold.com .

Market Abuse Regulation ('MAR') Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

**ENDS**

For further information, please visit http://www.coragold.com or contact:

Bert Monro / Norm Bailie	Cora Gold Limited	[phone]
Christopher Raggett / Charlie Beeson	finnCap Ltd (Nomad & Joint Broker)	[phone]
Andy Thacker / James Pope	Turner Pope Investments (Joint Broker)	[phone]
Megan Dennison / Susie Geliher	St Brides Partners (Financial PR)	[phone]

Notes

Cora is a gold company focused on two world class gold regions in Mali and Senegal in West Africa. Historical exploration has resulted in the highly prospective Sanankoro Gold Discovery, in addition to multiple, high potential, drill ready gold targets within its broader portfolio. Cora's primary focus is on further developing Sanankoro in the Yanfolila Gold Belt (Southern Mali), which Cora believes has the potential for a standalone mine development. Sanankoro has a positive Scoping Study published on it showing an 107% IRR and US$41.5m NPV₈ at a US$1,500 gold price. Cora's highly experienced management team has a proven track record in making multi-million ounce gold discoveries, which have been developed into operating mines.

Chairman's Statement

I am pleased to present the Annual Report of Cora Gold Limited ('Cora' or the 'Company') and its subsidiaries (together the 'Group') for the year ended 31 December 2020.

Cora is a gold company focused on two world class gold regions in Mali and Senegal in West Africa, being the Yanfolila Gold Belt (south Mali) and the Kédougou-Kéniéba Inlier gold belt (also known as the 'Kenieba Window'; west Mali / east Senegal).

The strategy of the Company is, through systematic exploration, to discover, delineate and develop economic ore bodies. Historical exploration has resulted in the highly prospective Sanankoro Gold Discovery ('Sanankoro' or 'Sanankoro Gold Project') in the Yanfolila Gold Belt, in addition to multiple, high potential, drill ready gold targets within its broader portfolio. Cora's highly experienced and successful management team has a proven track record in making multi-million ounce gold discoveries which have been developed into operating mines.

Cora's primary focus is on further developing Sanankoro, which the Company believes has the potential for a standalone mine development. In January 2020 we published an initial Scoping Study on the Sanankoro Gold Discovery which included a scenario at a gold price of US$1,500/oz showing an internal rate of return of 107% and a net present value (at 8% discount rate) of US$41.5 million. This study assists in de-risking the project by establishing a framework for understanding the economics of a future mine development and also provides guidance for the on-going exploration programmes to maximise the delineation of further economic mineralisation. Prior to this, in December 2019 the Company announced a JORC-compliant maiden pit constrained Inferred Mineral Resource Estimate ('MRE') at Sanankoro of 5.0 million tonnes at 1.6 g/t Au for 265,000 ounces of gold from independent consultants SRK Consulting (UK) Limited ('SRK'). This is an initial step in determining the overall potential of Sanankoro and reconfirms the SRK derived Exploration Target of approximately 1-2 million ounces of gold within 100 metres of surface (as reported in October 2018). The MRE is based on under 25% of the total 40 linear kilometre strike length of the potential mineralised zones identified to date. The majority (88%) of the Inferred MRE is derived from oxide material. The small amount of sulphide material in the MRE confirms our belief that exploration expansion into the sulphide zones could provide significant future upside. Cora's current focus is both on resource growth, to enable a +6 year mine life, as well as additional metallurgical test work studies. The Company has now moved into feasibility study work with the aim of completing a Definitive Feasibility Study ('DFS') before the end of 2021 with a view to commencing mine construction at Sanankoro in 2022.

In order to underpin and fund the future development of the Sanankoro Gold Project in June 2020 the Company entered into a conditional US$21 million mandate and term sheet with investment firm Lionhead Capital Advisors Proprietary Limited ('Lionhead'). This is conditional on, among other matters, the completion of a DFS on Sanankoro by the end of 2021. The US$21 million Project Financing comprises US$6 million equity, US$5 million convertible loan note and US$10 million debt. This level of support for Cora's flagship project is very encouraging and is something not enjoyed by many of its peers. Paul Quirk, a non-executive director of Cora, is a director of Lionhead. With the exception of Paul Quirk who was precluded from opining, Cora's directors consider, having consulted with its nominated adviser at that time, that the terms of the proposed Project Financing are fair and reasonable insofar as the Company's shareholders are concerned.

The military coup which took place in Mali on 18 August 2020 was quickly followed by the resignation of President Ibrahim Boubacar Keïta and the dissolution of the national assembly. Subsequently an interim president, President Bah Ndaw, and a transitional government were appointed, and as a result previous international sanctions against Mali were lifted, including those of the Economic Community of West African States which stated that the country had made "notable advances towards constitutional normalisation." I am pleased to report that Cora's activities were unaffected throughout this period.

On 02 March 2021 a permis de recherche in respect of an area known as Sanankoro II was awarded to a group entity. This same area was previously covered by the Sanankoro Permit which expired, in accordance with the Mining Code 2012, on 01 February 2020. The Sanankoro II Permit has been awarded under Mali's new Mining Code 2019 and as such it has a term of 9 years. Following the award of the Sanankoro II permit the Company announced the commencement of a significant drilling programme at its flagship Sanankoro Gold Project. The Company plans to drill up to 35,000 metres by end of July 2021, with a dual focus on targeting resource growth as well as infill drilling to convert existing Inferred resources to Indicated. This drill programme will be the largest single programme that Cora has ever completed. Following the completion of the drill programme the Company will be targeting an update to its mineral resource estimate.

Cora places the health and safety of its employees and contractors as its highest priority. This is especially relevant during the current COVID-19 pandemic. During April 2020 we announced that in line with this, and following advice received from the Senegalese Government, Cora had suspended its drill programme at the Madina Foulbé Permit in eastern Senegal. We look forward to recommencing and completing this drill programme as soon as it is appropriate and practical to do so. Meanwhile field work continues across a number of permits in Mali, including some of those in the Sanankoro Project Area. Cora will continue to follow its strict protocols to reduce the risk of transmission of COVID-19 at the Group's relatively isolated field camps.

Early in 2020 the Company announced the appointment of Robert ('Bert') Monro as Chief Executive Officer ('CEO') and Director, replacing Jonathan ('Jon') Forster who stepped down from his post as CEO and Director to reduce his workload after a 40 year career in the minerals industry. We are fortunate to have Jon continuing to work as a technical adviser to the Company. In his role as CEO Bert brings a huge amount of enthusiasm, an in-depth understanding of the junior gold sector and a keen focus on adding shareholder value.

In September 2020 Cora announced the appointment of Norman ('Norm') Bailie as Head of Exploration. Norm is an accredited Chartered Professional Geologist and Manager with 29 years' experience in gold mining and exploration. He joins Cora from his most recent role as Group Exploration Manager for Centamin plc, the FTSE-250 gold mining company (LSE:CEY). Norm boasts a wealth of exploration experience across Africa and has held senior positions with junior explorers, mid-tier and major mining companies, independent private funds and consultancies, and has worked from established mine-based operations to greenfield appraisal and new country reconnaissance. Norm has a proven track record of over 30Moz in resource discovery and driven successful exploration growth at a number of major African mines such as Sukari, Tasiast, Chirano and Obuasi. Norm will direct resource discovery and growth, manage the geological modelling, MRE delivery and contribute to Cora's corporate development strategy. This experience will be valuable as we work towards our primary objective of further developing Sanankoro with both resource growth and completing a DFS.

On 07 October 2020 Andrew Chubb was appointed Non-Executive Director. Andrew and myself are the two independent non-executive directors on the board of directors of the Company. Andrew is a Partner and Head of Mining at natural resources focused investment bank Hannam & Partners. He has a broad range of international corporate finance, restructuring, capital markets, and mergers and acquisitions experience focusing on the metals, mining and natural resources sectors.

During the year the Group successfully completed the following subscription fundraising and certain warrants to subscribe for shares were exercised:

· on 22 April 2020 the Company closed a subscription for 60,838,603 ordinary shares at a price of 4.75 pence per ordinary share for total gross proceeds of GBP£2,889,833.66; and

· prior to expiry on 30 September 2020 warrants to subscribe for 14,866,989 ordinary shares at a price of 10 pence per ordinary share were exercised for total gross proceeds of GBP£1,486,698.90.

Today the Company is well positioned for its upcoming work programmes as we are focused on resource growth at Sanankoro. The longer-term objective of delivering a DFS on Sanankoro before the end of 2021 remains in place as we focus on proving up shallow oxide ounces.

Cora is well placed to continue to discover and define economic gold and add shareholder value. We are very much looking forward to 2021, with a busy schedule of work programmes planned once again. We are confident that positive news flow will be generated throughout the coming months. I should like to take this opportunity to thank the Cora team for their ongoing hardwork and thank Cora's shareholders for their ongoing support. 2020 was a positive year for the Company and I am confident Cora will make further significant progress during 2021 and beyond.

Edward Bowie

Non-Executive Director and Chairman

14 May 2021

Consolidated Statement of Financial Position

as at 31 December 2020

All amounts stated in thousands of United States dollar

	Note(s)		2020 US$'000	2019 US$'000
Non-current assets
Intangible assets	9		13,665 ________	11,374 ________
Current assets
Trade and other receivables	10		59	186
Cash and cash equivalents	11		4,514 ________	2,058 ________
			4,573 ________	2,244 ________
Total assets			18,238 ________	13,618 ________
Current liabilities
Trade and other payables	12		(216) ________	(450) ________
Total liabilities			(216) ________	(450) ________
Net current assets			4,357 ________	1,794 ________
Net assets			18,022 ________	13,168 ________
Equity and reserves
Share capital	14		18,118	12,675
Retained (deficit) / earnings			(96) ________	493 ________
Total equity			18,022 ________	13,168 ________

Consolidated Statement of Comprehensive Income

for the year ended 31 December 2020

All amounts stated in thousands of United States dollar (unless otherwise stated)

	Note(s)		2020 US$'000	2019 US$'000
Overhead costs	6		(727)	(679)
Impairment of intangible assets	9		- ________	(796) ________
Loss before income tax			(727)	(1,475)
Income tax	7		- ________	- ________
Loss for the year			(727)	(1,475)
Other comprehensive income			- ________	- ________
Total comprehensive loss for the year			(727) ________	(1,475) ________
Earnings per share from continuing operations attributable to owners of the parent
Basic earnings per share (United States dollar)	8		(0.0041) ________	(0.0152) ________
Fully diluted earnings per share (United States dollar)	8		(0.0041) ________	(0.0152) ________

Consolidated Statement of Changes in Equity

for the year ended 31 December 2020

All amounts stated in thousands of United States dollar

Share capital US$'000

Retained (deficit) / earnings US$'000

Total equity US$'000

As at 01 January 2019		8,617 ________	1,932 ________	10,549 ________
Loss for the year		- ________	(1,475) ________	(1,475) ________
Total comprehensive loss for the year		- ________	(1,475) ________	(1,475) ________
Proceeds from shares issued		4,216	-	4,216
Issue costs		(147)	-	(147)
Issue costs - warrants		(11)	-	(11)
Share based payments - share options and warrants		- ________	36 ________	36 ________
Total transactions with owners, recognised directly in equity		4,058 ________	36 ________	4,094 ________
As at 31 December 2019		12,675 ________	493 ________	13,168 ________

As at 01 January 2020		12,675 ________	493 ________	13,168 ________
Loss for the year		- ________	(727) ________	(727) ________
Total comprehensive loss for the year		- ________	(727) ________	(727) ________
Proceeds from shares issued		3,554	-	3,554
Issue costs		(22)	-	(22)
Proceeds from warrants exercised		1,911	-	1,911
Share based payments - share options		- ________	138 ________	138 ________
Total transactions with owners, recognised directly in equity		5,443 ________	138 ________	5,581 ________
As at 31 December 2020		18,118 ________	(96) ________	18,022 ________

Consolidated Statement of Cash Flows

for the year ended 31 December 2020

All amounts stated in thousands of United States dollar

	Note(s)	2020 US$'000	2019 US$'000
Cash flows from operating activities
Loss for the year		(727)	(1,475)
Adjustments for:
Share based payments		138	25
Impairment of intangible assets	9	-	796
Decrease / (increase) in trade and other receivables		127	(82)
(Decrease) / increase in trade and other payables		(179) ________	258 ________
Net cash used in operating activities		(641) ________	(478) ________
Cash flows from investing activities
Additions to intangible assets		(2,346) ________	(2,356) ________
Net cash used in investing activities		(2,346) ________	(2,356) ________
Cash flows from financing activities
Proceeds from shares issued	14	5,465	4,216
Issue costs	14	(22) ________	(147) ________
Net cash generated from financing activities		5,443 ________	4,069 ________
Net increase in cash and cash equivalents		2,456	1,235
Cash and cash equivalents at beginning of year	11	2,058 ________	823 ________
Cash and cash equivalents at end of year	11	4,514 ________	2,058 ________

Notes to the Consolidated Financial Statements

for the year ended 31 December 2020

All tabulated amounts stated in thousands of United States dollar (unless otherwise stated)

1.  General information

The principal activity of Cora Gold Limited (the 'Company') and its subsidiaries (together the 'Group') is the exploration and development of mineral projects, with a primary focus in West Africa. The Company is incorporated and domiciled in the British Virgin Islands. The address of its registered office is Rodus Building, Road Reef Marina, P.O. Box 3093, Road Town, Tortola VG1110, British Virgin Islands.

2.  Accounting policies

The principal accounting policies applied in the preparation of financial statements are set out below ('Accounting Policies' or 'Policies'). These Policies have been consistently applied to all the periods presented, unless otherwise stated.

2.1.  Basis of preparation

The consolidated financial statements of Cora Gold Limited have been prepared in accordance with International Financial Reporting Standards ('IFRS') and IFRS Interpretations Committee ('IFRS IC') as adopted by the European Union ('EU'). The consolidated financial statements have been prepared under the historical cost convention.

The financial statements are presented in United States dollar (currency symbol: USD or US$), rounded to the nearest thousand, which is the Group's functional and presentational currency.

The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4.

(a)  New and amended standards mandatory for the first time for the financial period beginning 01 January 2020

The following new standards and amendments to standards and interpretations are effective for the financial period beginning on or after 01 January 2020 and have been applied in preparing these financial statements:

● IFRS 3 (Amendments): Business Combinations;

● IAS 1 and IAS 8 (Amendments): Definition of Material; and

● Amendments to References to the Conceptual Framework in IFRS Standards.

The adoption of these standards and amendments did not have any material impact on the disclosures, or on the financial position or performance of the Group reported in these financial statements.

(b)  New standards, amendments and interpretations in issue but not yet effective or not yet endorsed and not early adopted

The following standards have been published and are mandatory for accounting periods beginning after 01 January 2020 but have not been early adopted by the Group or Company and could have impact on the Group and Company financial statements:

Standard	Impact on initial application	Effective date
IAS 1	Presentation of Financial Statements: Classification of Liabilities as Current or Non-current and Amendments to IAS 1: Classification of Liabilities as Current or Non-current - Deferral of Effective Date	01 January 2023
IFRS 3	Business Combinations - Reference to the Conceptual Framework	01 January 2022
IAS 16 (Amendments)	Property, Plant and Equipment	01 January 2022
IAS 37	Provisions, Contingent Liabilities and Contingent Assets	01 January 2022
Annual Improvements to IFRS Standards	2018-2020 Cycle	01 January 2022

The Group is evaluating the impact of the new and amended standards above. The directors believe that these new and amended standards are not expected to have a material impact on the Group's results or shareholders' funds.

2.2.  Basis of consolidation

The consolidated financial statements incorporate those of the Company and its subsidiary undertakings for all periods presented.

Subsidiaries are entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The Group applies the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

Acquisition-related costs are expensed as incurred unless they result from the issuance of shares, in which case they are offset against the premium on those shares within equity.

Where necessary, adjustments are made to the financial information of subsidiaries to bring the accounting policies used into line with those used by other members of the Group. All intercompany transactions and balances between Group entities are eliminated on consolidation.

As at 31 December 2020 and 2019 the Company held:

● a 100% shareholding in Cora Gold Mali SARL (registered in the Republic of Mali; the address of its registered office is Rue 224 Porte 1279, Hippodrome 1, BP 2788, Bamako, Republic of Mali);

● a 100% shareholding in Cora Exploration Mali SARL (the address of its registered office is Rue 224 Porte 1279, Hippodrome 1, BP 2788, Bamako, Republic of Mali); and

● a 95% shareholding in Sankarani Ressources SARL (the address of its registered office is Rue 841 Porte 202, Faladiè SEMA, BP 366, Bamako, Republic of Mali);

and Cora Resources Mali SARL (registered in the Republic of Mali; the address of its registered office is Rue 841 Porte 202, Faladiè SEMA, BP 366, Bamako, Republic of Mali) was a wholly owned subsidiary of Sankarani Ressources SARL.

The remaining 5% of Sankarani Ressources SARL can be purchased from a third party for US$1,000,000.

2.3.  Interest in jointly controlled entities

Joint venture arrangements that involve the establishment of a separate entity in which each venturer has joint control are referred to as jointly controlled entities. The results and assets and liabilities of jointly controlled entities are included in these financial statements for the period using the equity method of accounting.

2.4.  Going concern

Given the uncertainties created by the current COVID-19 pandemic the directors will continue to monitor its impact on the Group's activities and financial resources.

The financial statements have been prepared on a going concern basis. The directors have prepared cash flow forecasts for the period ending 31 December 2021. The forecasts include the costs of progressing the Group's projects, and the corporate and operational overheads of the Group. The forecasts demonstrate that the Group will require additional funds during the going concern period in order to undertake all the planned exploration and evaluation activities. The directors are confident in the ability of the Group to raise additional funding when required from the issue of equity or the sale of assets. Any delays in the timing and / or quantum of raising additional funds can be accommodated by deferring discretionary exploration and evaluation expenditure.

The directors have a reasonable expectation that the Group will have adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements.

2.5.  Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the board of directors that makes strategic decisions.

2.6.  Foreign currencies

(i)  Functional and presentational currency

Items included in the financial statements of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the 'functional currency'). The financial statements are presented in United States dollar, rounded to the nearest thousand, which is the Company's and Group's functional and presentational currency.

(ii)  Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where such items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

2.7.  Investments

Investments in subsidiary companies are stated at cost less provision for impairment in value, which is recognised as an expense in the period in which the impairment is identified in the Company accounts. These investments are consolidated in the Group consolidated accounts.

2.8.  Intangible assets

The Group has adopted the provisions of IFRS 6 Exploration for and Evaluation of Mineral Resources.

The Group capitalises expenditure as project costs, categorised as intangible assets, when it determines that those costs will be successful in finding specific mineral resources. Expenditure included in the initial measurement of project costs and which are classified as intangible assets relate to the acquisition of rights to explore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource. Capitalisation of pre-production expenditure ceases when the mining property is capable of commercial production. Project costs are recorded and held at cost. An annual review is undertaken of each area of interest to determine the appropriateness of continuing to capitalise and carry forward project costs in relation to that area of interest. Accumulated capitalised project costs in relation to (i) an expired permit, (ii) an abandoned area of interest and / or (iii) a joint venture over an area of interest which is now ceased, will be written off in full as an impairment to profit or loss in the year in which (i) the permit expired, (ii) the area of interest was abandoned and / or (iii) the joint venture ceased.

Exploration and evaluation costs are assessed for impairment when facts and circumstances suggest that the carrying amount of an asset may exceed its recoverable amount.

2.9.  Financial assets

Classification

The Group's financial assets consist of financial assets held at amortised cost. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

Financial assets held at amortised cost

Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortised cost. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains / (losses) together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the statement of profit or loss.

They are included in current assets, except for maturities greater than 12 months after the reporting date, which are classified as non-current assets. The Group's financial assets at amortised cost comprise trade and other current assets and cash and cash equivalents at the year-end.

Recognition and measurement

Regular purchases and sales of financial assets are recognised on the trade date - the date on which the Group commits to purchasing or selling the asset. Financial assets are initially measured at fair value plus transaction costs. Financial assets are de-recognised when the rights to receive cash flows from the assets have expired or have been transferred, and the Group has transferred substantially all of the risks and rewards of ownership.

Financial assets are subsequently carried at amortised cost using the effective interest method.

Impairment of financial assets

The Group assesses, on a forward-looking basis, the expected credit losses associated with its financial assets carried at amortised cost. For trade and other receivables due within 12 months the Group applies the simplified approach permitted by IFRS 9. Therefore, the Group does not track changes in credit risk, but rather recognises a loss allowance based on the financial asset's lifetime expected credit losses at each reporting date.

A financial asset is impaired if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset, and that loss event(s) had an impact on the estimated future cash flows of that asset that can be estimated reliably. The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset, or a group of financial assets, is impaired.

The criteria that the Group uses to determine that there is objective evidence of an impairment loss include:

● significant financial difficulty of the issuer or obligor;

● a breach of contract, such as a default or delinquency in interest or principal repayments;

● the Group, for economic or legal reasons relating to the borrower's financial difficulty, granting to the borrower a concession that the lender would not otherwise consider;

● it becomes probable that the borrower will enter bankruptcy or other financial reorganisation.

The Group first assesses whether objective evidence of impairment exists.

The amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred), discounted at the financial asset's original effective interest rate. The asset's carrying amount is reduced and the loss is recognised in profit or loss.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor's credit rating), the reversal of the previously recognised impairment loss is recognised in profit or loss.

2.10. Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand, and are subject to an insignificant risk of changes in value.

2.11. Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

2.12. Reserves

Retained (deficit) / earnings - the retained (deficit) / earnings reserve includes all current and prior periods retained profit and losses, and share based payments.

2.13. Financial liabilities at amortised cost

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value, and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities are initially measured at fair value. They are subsequently measured at amortised cost using the effective interest method.

Financial liabilities are de-recognised when the Group's contractual obligations expire or are discharged or cancelled.

2.14. Provisions

The Group provides for the costs of restoring a site where a legal or constructive obligation exists. The estimated future costs for known restoration requirements are determined on a site-by-site basis and are calculated based on the present value of estimated future costs. All provisions are discounted to their present value.

2.15. Taxation

Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. Current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

2.16. Share based payments

Equity-settled share based payments with employees and others providing services are measured at the fair value of the equity instruments at the grant date. Fair value is measured by use of an appropriate pricing model. The Company has adopted the Black-Scholes Model for this purpose.

Equity-settled share based payment transactions with other parties are measured at the fair value of the goods and services, except where the fair value cannot be estimated reliably in which case they are valued at the fair value of the equity instrument granted.

3.  Financial risk management

3.1.  Financial risk factors

The Group's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.

Risk management is carried out by the management team under policies approved by the board of directors.

(i)  Market risk

The Group is exposed to market risk, primarily relating to interest rate, foreign exchange and commodity prices. The Group does not hedge against market risks as the exposure is not deemed sufficient to enter into forward contracts. The Group has not sensitised the figures for fluctuations in interest rates, foreign exchange or commodity prices as the directors are of the opinion that these fluctuations would not have a significant impact on the financial statements of the Group at the present time. The directors will continue to assess the effect of movements in market risks on the Group's financial operations and initiate suitable risk management measures where necessary.

(ii)  Credit risk

Credit risk arises from cash and cash equivalents as well as outstanding receivables. To manage this risk, the Group periodically assesses the financial reliability of customers and counterparties.

The amount of exposure to any individual counterparty is subject to a limit, which is assessed by the board of directors.

The Group considers the credit ratings of banks in which it holds funds in order to reduce exposure to credit risk.

(iii)  Liquidity risk

Cash flow and working capital forecasting is performed for all entities in the Group for regular reporting to the board of directors. The directors monitor these reports and forecasts to ensure the Group has sufficient cash to meet its operational needs.

3.2.  Capital risk management

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, in order to enable the Group to continue its exploration and evaluation activities, and to maintain an optimal capital structure to reduce the cost of capital.

The Group defines capital based on the total equity of the Company. The Group monitors its level of cash resources available against future planned operational activities and may issue new shares in order to raise further funds from time to time.

4.  Judgements and key sources of estimation uncertainty

The preparation of the financial statements in conformity with IFRSs requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the year. Actual results may vary from the estimates used to produce these financial statements.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Significant items subject to such estimates and assumptions include, but are not limited to:

(i)  Intangible assets (see Note 9)

An annual review is undertaken of each area of interest to determine the appropriateness of continuing to capitalise and carry forward project costs in relation to that area of interest. Accumulated capitalised project costs in relation to (i) an expired permit, (ii) an abandoned area of interest and / or (iii) a joint venture over an area of interest which is now ceased, will be written off in full as an impairment to the statement of income in the year in which (i) the permit expired, (ii) the area of interest was abandoned and / or (iii) the joint venture ceased.

Each exploration project is subject to review by a senior Group geologist to determine if the exploration results returned to date warrant further exploration expenditure and have the potential to result in an economic discovery. This review takes into consideration long-term metal prices, anticipated resource volumes and grades, permitting and infrastructure. The directors have reviewed each project with reference to these criteria and have made adjustments for any impairment as necessary.

5.  Segmental analysis

The Group operates principally in the UK and West Africa, with operations managed on a project by project basis. Activities in the UK are administrative in nature whilst the activities in West Africa relate to exploration and evaluation.

An analysis of the Group's overhead costs, and reportable segment assets and liabilities is as follows:

	UK US$'000	Africa US$'000	Total US$'000
Year ended 31 December 2019
Overhead costs	656	23	679
Impairment of intangible assets	- _______	796 _______	796 _______
Loss from operations per reportable segment	656 _______	819 _______	1,475 _______
As at 31 December 2019
Reportable segment assets	2,062	11,556	13,618
Reportable segment liabilities	(52) _______	(398) _______	(450) _______

	UK US$'000	Africa US$'000	Total US$'000
Year ended 31 December 2020
Overhead costs	703	24	727
Impairment of intangible assets	- _______	- _______	- _______
Loss from operations per reportable segment	703 _______	24 _______	727 _______
As at 31 December 2020
Reportable segment assets	4,522	13,716	18,238
Reportable segment liabilities	(87) _______	(129) _______	(216) _______

6.  Expenses by nature

		2020 US$'000	2019 US$'000
Consultants		4	2
Employees' and directors' remuneration (see below)		523	360
General administration		44	45
Travel		24	30
Legal and professional		206	163
Investor relations and conferences		94	111
Auditor's remuneration (see below)		35	37
Share based payments - share options		138	25
Foreign exchange gain		(341) _______	(94) _______
Overhead costs		727 _______	679 _______

Employees' and directors' remuneration

The average monthly number of employees and directors was as follows:

		2020	2019
Non-executive directors		3	4
Employees		31 _______	27 _______
Total average number of employees and directors		34 _______	31 _______

Employees' and directors' remuneration comprised:

		2020 US$'000	2019 US$'000
Non-executive directors' fees		77	87
Wages and salaries		1,040	765
Social security costs		111	34
Pension contributions		14 _______	2 _______
Total employees' and directors' remuneration		1,242	888
Capitalised to project costs (intangible assets)		(719) _______	(528) _______
Employees' and directors' remuneration expensed		523 _______	360 _______

Auditor's remuneration

Expenditures relating to the Company's auditor, PKF Littlejohn LLP, in respect of both audit and non-audit services were as follows:

		2020 US$'000	2019 US$'000
Audit fees: audit of the Group and Company's financial statements		35 _______	37 _______
Auditor's remuneration expensed		35 _______	37 _______

7.  Income tax

No current or deferred tax arose in either year.

 

The tax on the Group's loss before tax differs from the theoretical amount that would arise as follows:

		2020 US$'000	2019 US$'000
Loss before tax		(727) _______	(1,475) _______
Tax at standard rate of 19% (2019: 19%)		(138)	(280)
Effects of:
Expenses not deductible for tax		26	5
Impairment of intangible assets		-	151
Losses carried forward not recognised as a deferred tax asset		112 _______	124 _______
Income tax		- _______	- _______

8.  Earnings per share

The calculation of the basic and fully diluted earnings per share attributable to the equity shareholders is based on the following data:

		2020 US$'000	2019 US$'000
Net loss attributable to equity shareholders		(727) _______	(1,475) _______
Weighted average number of shares for the purpose of basic earnings per share (000's)		175,680 _______	96,953 _______
Weighted average number of shares for the purpose of fully diluted earnings per share (000's)		175,680 _______	96,953 _______
Basic earnings per share (United States dollar)		(0.0041) _______	(0.0152) _______
Fully diluted earnings per share (United States dollar)		(0.0041) _______	(0.0152) _______

As at 31 December 2020 the Company's issued and outstanding capital structure comprised a number of ordinary shares and share options (see Note 14).

As at 31 December 2019 the Company's issued and outstanding capital structure comprised a number of ordinary shares, warrants and share options (see Note 14).

 

9.  Intangible assets

Intangible assets relate to exploration and evaluation project costs capitalised as at 31 December 2020 and 2019, less impairment.

		2020 US$'000	2019 US$'000
As at 01 January		11,374	9,814
Additions		2,291	2,356
Impairment		- _______	(796) _______
As at 31 December		13,665 _______	11,374 _______

Additions to project costs during the years ended 31 December 2020 and 2019 were in the following geographical areas:

		2020 US$'000	2019 US$'000
Mali		1,982	2,288
Senegal		309 _______	68 _______
Additions to projects costs		2,291 _______	2,356 _______

Impairment of project costs during the years ended 31 December 2020 and 2019 relate to the following terminated projects:

		2020 US$'000	2019 US$'000
Djangounté Est (Mali), also known as Diangounté Est		-	494
Mogoyako (Mali), also known as Mokoyako		-	195
Karan (Mali)		- _______	107 _______
Impairment of project costs		- _______	796 _______

Those projects which were terminated were considered by the directors to be no longer prospective.

Project costs capitalised as at 31 December 2020 and 2019 related to the following geographical areas:

		2020 US$'000	2019 US$'000
Mali		13,248	11,266
Senegal		417 _______	108 _______
As at 31 December		13,665 _______	11,374 _______

10.  Trade and other receivables

		2020 US$'000	2019 US$'000
Other receivables		21	119
Prepayments		38 _______	67 _______
		59 _______	186 _______

11.  Cash and cash equivalents

Cash and cash equivalents held as at 31 December 2020 and 2019 were in the following currencies:

		2020 US$'000	2019 US$'000
British pound sterling (GBP£)		4,456	1,981
CFA Franc (XOF)		30	63
Euro (EUR€)		19	5
United States dollar (US$)		9 _______	9 _______
		4,514 _______	2,058 _______

External ratings of cash at bank and short-term deposits as at 31 December 2020 and 2019 were as follows:

		2020 US$'000	2019 US$'000
A1		4,484	1,995
A2		30 _______	63 _______
		4,514 _______	2,058 _______

12.  Trade and other payables

		2020 US$'000	2019 US$'000
Trade payables		138	24
Other payables and taxes		-	62
Accruals		78 _______	364 _______
		216 _______	450 _______

 

13.  Financial instruments

		2020 US$'000	2019 US$'000
Financial assets at amortised cost
Trade and other receivables		21	119
Cash and cash equivalents		4,514 _______	2,058 _______
		4,535 _______	2,177 _______

		2020 US$'000	2019 US$'000
Financial liabilities at amortised cost
Trade and other payables		216 _______	388 _______
		216 _______	388 _______

14.  Share capital

The Company is authorised to issue an unlimited number of no par value shares of a single class.

As at 31 December 2018 the Company's issued and outstanding capital structure comprised:

● 66,040,294 ordinary shares;

● warrants to subscribe for 320,575 ordinary shares in the capital of the Company at a price of 16.5 pence (British pound sterling) per ordinary share expiring on 09 October 2020; and

● share options over 2,225,000 ordinary shares in the capital of the Company exercisable at 16.5 pence (British pound sterling) per ordinary share expiring on 18 December 2022.

On 30 April 2019 the Company closed a placing and subscription for 35,064,845 ordinary shares in the capital of the Company at a price of 3.85 pence (British pound sterling) per ordinary share for total gross proceeds of GBP£1,349,996.53. Certain directors of the Company participated in this subscription (see Note 18).

On 30 September 2019 the Company closed a placing and subscription for 28,571,428 ordinary shares in the capital of the Company at a price of 7 pence (British pound sterling) per ordinary share (the 'Fundraising Shares') for total gross proceeds of GBP£1,999,999.96. Each Fundraising Share has a warrant attached to subscribe for one new ordinary share in the capital of the Company at a price of 10 pence (British pound sterling) per ordinary share expiring on 30 September 2020. Certain directors of the Company participated in this subscription (see Note 18). In addition the Company issued warrants to a broker of the placing to subscribe for 2,142,857 ordinary shares in the capital of the Company at a price of 10 pence (British pound sterling) per ordinary share expiring on 30 September 2020.

On 09 October 2019 the board of directors granted and approved share options over 6,550,000 ordinary shares in the capital of the Company exercisable at 8.5 pence (British pound sterling) per ordinary share expiring on 09 October 2023. 2,500,000 of such share options were conditional upon Robert Monro taking on the role of Chief Executive Officer and Director of the Company. This condition was satisfied on 02 January 2020 when Robert Monro was appointed Chief Executive Officer and Director of the Company. Regarding the vesting of these share options:

● 1,012,500 vest on each of 09 October 2019, 09 April 2020, 09 October 2020 and 09 April 2021; and

● 625,000 vest on each of 02 January 2020, 02 July 2020, 02 January 2021 and 02 July 2021.

Following the resignation of Geoffrey McNamara as Non-Executive Director and Chairman of the Company on 12 November 2019 the following share options were cancelled:

● share options over 325,000 ordinary shares in the capital of the Company exercisable at 16.5 pence (British pound sterling) per ordinary share expiring on 18 December 2022; and

● share options over 350,000 ordinary shares in the capital of the Company exercisable at 8.5 pence (British pound sterling) per ordinary share expiring on 09 October 2023.

As at 31 December 2019 the Company's issued and outstanding capital structure comprised:

● 129,676,567 ordinary shares;

● warrants to subscribe for 30,714,285 ordinary shares in the capital of the Company at a price of 10 pence (British pound sterling) per ordinary share expiring on 30 September 2020;

● warrants to subscribe for 320,575 ordinary shares in the capital of the Company at a price of 16.5 pence (British pound sterling) per ordinary share expiring on 09 October 2020;

● share options over 1,900,000 ordinary shares in the capital of the Company exercisable at 16.5 pence (British pound sterling) per ordinary share expiring on 18 December 2022; and

● share options over 6,200,000 ordinary shares in the capital of the Company exercisable at 8.5 pence (British pound sterling) per ordinary share expiring on 09 October 2023.

On 22 April 2020 the Company closed a subscription for 60,838,603 ordinary shares in the capital of the Company at a price of 4.75 pence (British pound sterling) per ordinary share for total gross proceeds of GBP£2,889,833.66. Certain directors of the Company participated in this subscription (see Note 18).

Prior to expiry on 30 September 2020 warrants to subscribe for 14,866,989 ordinary shares in the capital of the Company at a price of 10 pence (British pound sterling) per ordinary share were exercised for total gross proceeds of GBP£1,486,698.90. A director of the Company participated in this exercise of warrants (see Note 18). The balance of warrants to subscribe for 15,847,296 ordinary shares in the capital of the Company at a price of 10 pence (British pound sterling) per ordinary share expired on 30 September 2020.

Warrants to subscribe for 320,575 ordinary shares in the capital of the Company at a price of 16.5 pence (British pound sterling) per ordinary share expired on 09 October 2020.

On 12 October 2020 the board of directors granted and approved share options over 7,200,000 ordinary shares in the capital of the Company exercisable at 10 pence (British pound sterling) per ordinary share expiring on 12 October 2025.

As at 31 December 2020 the Company's issued and outstanding capital structure comprised:

● 205,382,159 ordinary shares;

● share options over 1,900,000 ordinary shares in the capital of the Company exercisable at 16.5 pence (British pound sterling) per ordinary share expiring on 18 December 2022;

● share options over 6,200,000 ordinary shares in the capital of the Company exercisable at 8.5 pence (British pound sterling) per ordinary share expiring on 09 October 2023; and

● share options over 7,200,000 ordinary shares in the capital of the Company exercisable at 10 pence (British pound sterling) per ordinary share expiring on 12 October 2025.

Movements in capital during the years ended 31 December 2020 and 2019 were as follows

	Number of shares	Number of warrants			Number of share options			Proceeds US$'000
		at 16.5 pence expiring 09 October 2020	at 10 pence expiring 30 September 2020		at 16.5 pence expiring 18 December 2022	at 8.5 pence expiring 09 October 2023	at 10 pence expiring 12 October 2025
As at 01 January 2019	66,040,294	320,575	-		2,225,000	-	-	8,617
Granting of share options	-	-	-		-	6,550,000	-	-
Cancellation of share options	-	-	-		(325,000)	(350,000)	-	-
Placings and subscriptions	63,636,273	-	28,571,428		-	-	-	4,216
Issued to broker of a placing	-	-	2,142,857		-	-	-	-
Issue costs - warrants	-	-	-		-	-	-	(11)
Issue costs	- __________	- _________	- _________		- _________	- _________	- _________	(147) _______
As at 31 December 2019	129,676,567	320,575	30,714,285		1,900,000	6,200,000	-	12,675
Granting of share options	-	-	-		-	-	7,200,000	-
Subscription	60,838,603	-	-		-	-	-	3,554
Exercise of warrants	14,866,989	-	(14,866,989)		-	-	-	1,911
Warrants expired	-	(320,575)	(15,847,296)		-	-	-	-
Issue costs	- __________	- _________	- _________		- _________	- _________	- _________	(22) _______
As at 31 December 2020	205,382,159 __________	- _________	- _________		1,900,000 _________	6,200,000 _________	7,200,000 _________	18,118 _______

The fair value of share options and warrants issued to broker of a placing has been calculated using the Black-Scholes Model, the inputs into which were as follows:

● for share options granted on 18 December 2017:

● strike price 16.5 pence (British pound sterling);

● share price 12.25 pence (British pound sterling);

● volatility 9.1%;

● expiry date 18 December 2022;

● risk free rate 1.5%; and

● dividend yield 0%;

● for warrants issued to broker of a placing on 30 September 2019:

● strike price 10 pence (British pound sterling);

● share price 7.63 pence (British pound sterling);

● volatility 35.4%;

● expiry date 30 September 2020;

● risk free rate 0.6%; and

● dividend yield 0%;

● for share options granted on 09 October 2019:

● strike price 8.5 pence (British pound sterling);

● share price 7.47 pence (British pound sterling);

● volatility 34.7%;

● expiry date 09 October 2023;

● risk free rate 0.6%; and

● dividend yield 0%;

● for share options granted on 12 October 2020:

● strike price 10 pence (British pound sterling);

● share price 10.5 pence (British pound sterling);

● volatility 25.9%;

● expiry date 12 October 2025;

● risk free rate 0.6%; and

● dividend yield 0%.

The cost of share based payments relating to share options has been recognised in the consolidated statement of comprehensive income and in retained earnings. The cost of warrants issued to a broker of a placing has been recognised as a deduction from equity.

15.  Ultimate controlling party

The Company does not have an ultimate controlling party.

As at 31 December 2020 the Company's largest shareholder was Brookstone Business Inc ('Brookstone') which held 53,060,025 ordinary shares, being 27.85% of the total number of ordinary shares issued and outstanding. Brookstone is wholly owned and controlled by First Island Trust Company Limited as Trustee of the Nodo Trust, a discretionary trust with a broad class of potential beneficiaries. Patrick Quirk, father of Paul Quirk (Non-Executive Director of the Company), is a potential beneficiary of the Nodo Trust.

Brookstone, Key Ventures Holding Limited and Paul Quirk (Non-Executive Director of the Company) (collectively the 'Investors'; as at 31 December 2020 their aggregated shareholdings being 31.61% of the total number of ordinary shares issued and outstanding) have entered into a Relationship Agreement to regulate the relationship between the Investors and the Company on an arm's length and normal commercial basis. In the event that Investors' aggregated shareholdings becomes less than 30% then the Relationship Agreement shall terminate. Key Ventures Holding Limited is wholly owned and controlled by First Island Trust Company Limited as Trustee of The Sunnega Trust, a discretionary trust with a broad class of potential beneficiaries. Paul Quirk (Non-Executive Director of the Company) is a potential beneficiary of The Sunnega Trust.

16.  Contingent liabilities

On 17 June 2020 the Company entered into a conditional US$21 million mandate and term sheet with investment firm Lionhead Capital Advisors Proprietary Limited ('Lionhead') to fund the development of the Company's Sanankoro Gold Project in southern Mali. This is conditional on, among other matters, the completion of a Definitive Feasibility Study on the Sanankoro Gold Project by 31 December 2021. Paul Quirk (Non-Executive Director of the Company) is a director of Lionhead. The US$21 million project financing comprises US$6 million equity, US$5 million convertible loan note and US$10 million debt. In the event that the Company secures debt from another party then the Company will pay a fee of US$200,000 to Lionhead. If the mandate with Lionhead terminates then no such fee shall be payable if debt is raised after 4 months following such termination.

The Gold Exploration Permits section of the Strategic Report contains details of potential Net Smelter Return royalty obligations by project area, together with options to buy out the royalty. At the current stage of development, it is not considered that the outcome of these contingent liabilities can be considered probable or reasonably estimable and hence no provision has been recognised in the financial statements.

17.  Capital commitments

On 10 March 2020 the Group entered into a contract with International Drilling Company Africa for 2,000 metres of drilling at the Madina Foulbé Permit in eastern Senegal. Drilling was suspended in April 2020 due to the COVID-19 pandemic. As at the time of suspension 642 metres of drilling had been completed and in accordance with the terms of the contract the Group had incurred expenditure of US$37,360. Drilling is expected to resume when it is possible and safe to do so.

On 14 April 2020 the Company entered into a contract with Digby Wells Environmental (Jersey) Limited to conduct an Environmental and Social Impact Assessment ('ESIA') for the Sanankoro Gold Project. Total estimated fees in respect of the ESIA are US$373,393. As at 31 December 2020 under the terms of the contract the Company had made payment of US$144,581, being 38.7% of the total estimated ESIA fees. The ESIA is expected to be completed in the second half of 2021.

18.  Related party transactions

During the year ended 31 December 2020:

● GBP£43,335 was paid to Norman Bailie, the Company's Head of Exploration (appointed 16 September 2020), and Mr Bailie's consultancy business, Phoenix (PPM) Consultants, for exploration services;

● GBP£2,015 was paid to David Pelham, Non-Executive Director of the Company, for geological consultancy services and disbursements;

● on 17 June 2020 the Company entered into a conditional US$21 million mandate and term sheet with investment firm Lionhead Capital Advisors Proprietary Limited ('Lionhead') to fund the development of the Company's Sanankoro Gold Project in southern Mali. This is conditional on, among other matters, the completion of a Definitive Feasibility Study on the Sanankoro Gold Project by 31 December 2021. Paul Quirk (Non-Executive Director of the Company) is a director of Lionhead. The US$21 million project financing comprises US$6 million equity, US$5 million convertible loan note and US$10 million debt. In the event that the Company secures debt from another party then the Company will pay a fee of US$200,000 to Lionhead. If the mandate with Lionhead terminates then no such fee shall be payable if debt is raised after 4 months following such termination;

● on 22 April 2020 the Company closed a subscription for 60,838,603 ordinary shares in the capital of the Company at a price of 4.75 pence (British pound sterling) per ordinary share for total gross proceeds of GBP£2,889,833.66. The following directors of the Company participated in this subscription:

● Robert Monro, Chief Executive Officer and Director of the Company (appointed 02 January 2020), subscribed for 315,789 ordinary shares for total gross proceeds of GBP£14,999.98; and

● Edward Bowie, Non-Executive Director and Chairman of the Company, subscribed for 210,526 ordinary shares for total gross proceeds of GBP£9,999.99; and

● prior to expiry on 30 September 2020 warrants to subscribe for 14,866,989 ordinary shares in the capital of the Company at a price of 10 pence (British pound sterling) per ordinary share were exercised for total gross proceeds of GBP£1,486,698.90. The following director participated in this exercise of warrants:

● Robert Monro, Chief Executive Officer and Director of the Company (appointed 02 January 2020), exercised warrants to subscribe for 142,857 ordinary shares for total gross proceeds of GBP£14,285.70.

During the year ended 31 December 2019:

● in relation to the services of Geoffrey McNamara, Non-Executive Director and Chairman of the Company (resigned 12 November 2019), fees totalling GBP£24,000 were paid to Tanamera Resources Pte Ltd, a company wholly owned by Geoffrey McNamara;

● GBP£523 was paid to Amphi Capital Limited ('Amphi') for consulting services. Amphi ceased providing these services to the Company on 30 June 2019. Edward Bowie, Non-Executive Director (appointed 01 July 2019) and Chairman (appointed 12 November 2019) of the Company, is a director and shareholder of Amphi;

● GBP£6,159 was paid to Hummingbird Resources plc ('Hummingbird'; AIM:HUM), a significant shareholder of the Company, for the reimbursement of costs relating to travel, accommodation, subsistence and conferences;

● in accordance with a Relationship Agreement dated 03 October 2017 fees totalling GBP£7,000 were paid to Hummingbird in relation to the services of Robert Monro as Non-Executive Director of the Company (resigned 01 July 2019) to 30 June 2019. Robert Monro was appointed Chief Executive Officer and Director of the Company on 02 January 2020;

● GBP£34,000 was paid to Hathaway Consulting Ltd ('Hathaway') for business development consulting services. Hathaway ceased providing these services to the Company on 31 December 2019. The sole director of Hathaway is Robert Monro, Non-Executive Director of the Company (resigned 01 July 2019). Robert Monro was appointed Chief Executive Officer and Director of the Company on 02 January 2020;

● on 30 April 2019 the Company closed a placing and subscription for 35,064,845 ordinary shares in the capital of the Company at a price of 3.85 pence (British pound sterling) per ordinary share for total gross proceeds of GBP£1,349,996.53. The following directors of the Company participated in this subscription:

● Key Ventures Holding Limited, which is wholly owned and controlled by First Island Trust Company Limited as Trustee of The Sunnega Trust being a discretionary trust of which Paul Quirk (Non-Executive Director of the Company) is a potential beneficiary, subscribed for 3,246,750 ordinary shares for total gross proceeds of GBP£124,999.88;

● Robert Monro, Non-Executive Director of the Company (resigned 01 July 2019; appointed Chief Executive Officer and Director of the Company on 02 January 2020), subscribed for 519,480 ordinary shares for total gross proceeds of GBP£19,999.98; and

● Jonathan Forster, Chief Executive Officer and Director of the Company (resigned 02 January 2020), subscribed for 129,870 ordinary shares for total gross proceeds of GBP£5,000; and

● on 30 September 2019 the Company closed a placing and subscription for 28,571,428 ordinary shares in the capital of the Company at a price of 7 pence (British pound sterling) per ordinary share (the 'Fundraising Shares') for total gross proceeds of GBP£1,999,999.96. Each Fundraising Share has a warrant attached to subscribe for one new ordinary share in the capital of the Company at a price of 10 pence (British pound sterling) per ordinary share expiring on 30 September 2020. The following directors of the Company participated in this subscription:

● Key Ventures Holding Limited, which is wholly owned and controlled by First Island Trust Company Limited as Trustee of The Sunnega Trust being a discretionary trust of which Paul Quirk (Non-Executive Director of the Company) is a potential beneficiary, subscribed for 357,142 ordinary shares for total gross proceeds of GBP£24,999.94;

● Edward Bowie, Non-Executive Director (appointed 01 July 2019) and Chairman (appointed 12 November 2019) of the Company, subscribed for 142,857 ordinary shares for total gross proceeds of GBP£9,999.99; and

● Robert Monro, Non-Executive Director of the Company (resigned 01 July 2019; appointed Chief Executive Officer and Director of the Company on 02 January 2020), subscribed for 142,857 ordinary shares for total gross proceeds of GBP£9,999.99.

19.  Events after the reporting date

On 02 March 2021 a permis de recherche was awarded to a Group entity in respect of an area known as Sanankoro II in southern Mali, being the same area previously covered by the Sanankoro Permit which expired, in accordance with Mali's Mining Code, on 01 February 2020. The Sanankoro II Permit has been awarded under Mali's new Mining Code 2019 and as such it has a term of 9 years. This completes the permitting process for Sanankoro II. The Sanankoro II Permit is one of five contiguous permits that together comprise the Sanankoro Gold Project.

On 10 February 2021 the Company entered into a contract with Capital Drilling Mali SARL for 20,000 metres of reverse circulation drilling and 2,000 metres of diamond drilling at the Sanankoro Gold Project for a total contract value of approximately US$1,200,000 plus ancillary costs. As at 30 April 2021 11,162 metres of drilling had been completed at a cost of US$553,295 including ancillary costs.

On 16 March 2021 the Company entered into a contract with Geodrill Limited for 10,000 metres of reverse circulation drilling at the Sanankoro Gold Project for a total contract value of approximately US$320,000 plus ancillary costs. As at the date of this report this drilling has not commenced.

 

END

 

 

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